A study of management decisions to adopt emission reduction measures in heavy industry in an emerging economy

Abstract

Heavy industry can face challenges in choosing applicable climate change mitigation measures due to a lack of technical background and practical guidance. A better understanding of these determinants is needed to design region-specific climate policies that most effectively enable more ‘successful’ low carbon transitions. Set in an emerging economy, this study aims to understand the determinants which underlie investment decision-making in greenhouse gas reduction. It relies on empirical research using an exploratory case study method in the leading cement company in Indonesia. The results show four key determinants influencing (constraining) adoption were (1) the primacy of profit-seeking objectives in operational planning and development; (2) the availability of sources (clinker substitutes and alternative energy fuels); (3) the limited access to cash capital; and (4) the complexity in implementing emissions reduction projects. The inquiry also compares determinants in an emerging and developed country to provide a comparative perspective on emissions management in manufacturing. It appears that firms from the industrial sector in emerging economies have investment strategies that are largely characterised by activities that accentuate achieving financial benefits or best value for money or cost savings in a short time frame, or ‘short-termism’. Currently, greenhouse gas emissions management activities tend to be second-preference strategies for firms in emerging economies, at least in the industrial manufacturing sector.

Mapping Climate Change Mitigation Strategies Adopted by Industries: An Overview from First Commitment of Kyoto Protocol (2009–2023)

“…Literature review showed that there were industries viz. cement [26]- [34], agriculture [13], [14], [35]- [39], energy [40], mining [41], [42], paper and pulp [44]- [45], iron and steel [7], [46]- [52], plastic [53], dairy [54], manufacturing [49], gas industry [45], [55]- [60], finance [61], [62], forest [63]- [67], water industry [68], wind power [69], pharmaceutical [70], chemical [71], [72], apparel [73], hospitability [74], construction [75], [76], cleantech [77] and real estate [78] were identified from the literature review. Amongst the listed strategies, many were repetitive which pointed to their high demand in the today's date, like fuel replacement wherein liquified natural gas will be used in place of coal, bioenergy in conjunction with carbon capture and storage [7],…”

“…It has been reported that an integrated process involved in green cement production can help to minimize the environmental influence of the cement industry's activity without compromising reliability, quality, cost, performance [111]. In case of paper and pulp industry, speculated technologies to increase the efficiency of paper and pulp industry include black liquor gasification and efficient drying technology and operational commitment from top management [44].…”

La sostenibilidad ambiental en la industria manufacturera del Ecuador. Un estudio desde las fuentes energéticas

“…Para analizar la sostenibilidad ambiental de las fuentes energéticas en las industrias manufactureras del Ecuador, se utiliza términos monetarios como: el gasto e inversión que realizan dichas empresas en las actividades económicas para reducir los gases de efecto invernadero (Oswald, 2017). Es por ello, que para el cuidado del ambiente se requiere de inversión, la cual refleje resultados a largo plazo al momento de realizar un gasto óptimo al implementar una nueva tecnología (Soaloon et al, 2023). De esta manera, la racionalidad económica tiene como objetivo, obtener un gasto productivo y mayor beneficios por medio de la inversión, tanto en bienes y servicios para reducir el efecto invernadero (Hernández, 2010).…”